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Economy in Brief

U.S. Leading Economic Indicators Continue to Rise
by Tom Moeller  December 17, 2015

The Conference Board's Index of Leading Economic Indicators increased 0.4% during November following an unrevised 0.6% October rise. The Action Economics Forecast Survey expected a 0.2% November gain. Three-month growth in the index jumped to 3.9% (AR), but it remained down from 6.7% in June. The largest positive contributions to the latest rise came from stronger building permits, a steeper interest rate yield curve, higher stock prices and an improved leading credit index. These were offset by a weaker ISM new orders index and higher initial unemployment insurance claims.

The coincident economic index ticked 0.1% higher after an unrevised 0.2% rise. The three-month growth rate eased to 2.1%, down from 2.9% in September. Nonfarm payroll employment, personal income less transfers and manufacturing & trade sales made positive contributions to the index while industrial production contributed negatively for a third straight month.

The lagging indicators series gained 0.3% after an unrevised 0.2% increase. Three-month growth in the index increased to 4.1%, but remained down from the 5.6% in July. More C&I loans, a higher consumer installment credit/personal income ratio and a stronger services CPI made the largest positive contributions to the index. An easier increase in labor costs and a lower inventory-to-sales ratio contributed negatively to the total's rise.

The ratio of coincident-to-lagging indicators is a measure of how the economy is performing versus its excesses. As the gain in the lagging series outpaced the coincident indicators, the ratio declined to its lowest level since April 2009, near the end of the last recession.

The Conference Board figures are available in Haver's BCI database; the components are available there, and most are also in USECON. The forecast figures for the Consensus are in the AS1REPNA database. Visit the Conference Board's site for coverage of leading indicator series from around the world.

Business Cycle Indicators (%) Nov Oct Sep Nov Y/Y 2014 2013 2012
Leading 0.4 0.6 0.0 3.4 5.8 3.3 2.1
Coincident 0.1 0.2 0.3 1.9 2.5 1.9 2.6
Lagging 0.3 0.2 0.5 4.2 3.8 3.8 3.1
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